Resale Rules Changes to come?

[mjc2003]

Depends on where you start the line!

I bought an SSR contract in 2005 for $83 and sold it in 2010 for $64. Just at first glance, that looks down to me...roughly 23% down in five years.

And most of that decline happened in the last year I owned it. Just looking quickly at the ROFR thread, the most common SSR price I see clearing ROFR is $50 per point. Even if you figure $55 as an average, that's still down an additional 14% from where I sold...less than a year ago.

I think I misunderstood Bill's point. I thought is reference to "change of policy" meant the 3/20 changes; now that I reread, I think he is talking about their change of policy towards ROFR, which has caused the prices to drop. I was only pointing out that the small sampling since 3/20 has not shown a drop off, but to your point, since they stopped effectively practicing ROFR the prices have definitely fallen quite a bit.

 

[disneychic]

.....this is all very interesting!

 

[DOCDDS]

Yup, reading the contract prior to buying is something all should do (and I would bet few actually do do--and even if they do, it's all pretty overwhelming when you first look into DVC. Even if you read the contract, my guess is lots of details go over the reader's head.)

I'm a lawyer. I read every document before I sign. But I don't do an arms-length legal analysis of every single purchase I make. And I've bought things that cost more than DVC (my car, my house, my son's education).

For those who say "read the contract" and then don't comment if things provided in the contract come to pass (i.e., changes from standard operating procedure at the time of purchase), I say come down from your ivory tower. In the real world, many people (including lawyers who read their contracts!) buy despite the legal language in the contract.

And those people are totally entitled to say "there have been changes and I'm uncomfortable with them."

As noted in my original post, I'm very glad I didn't recognize (altho I'd read the contract) how quickly many things were going to change. I'm not sure I'd have bought had I recognized that (despite reading language that makes it clear, in hindsight, that it could happen). It's something prospective buyers will benefit from knowing before writing their checks, I think.

But I wonder how many people would buy if they truly believed ALL they were going to get is a one-month booking advantage only for their home resort? Yes, that's the worst case scenario--but how likely is that worst case scenario?

It is nice to thouroughly read the paperwork before you sign on the dotted line but what good does any of this do if the DVC can change any of the rules any time they please. They can say it is for the betterment and quality of the ownership but the bottom line is that it is better for Disney. Nothing is guaranteed in these document other than your obligation to pay your fees. The funny thing is that Disney can make whatever rules they decide to and not be obligated to be subject to the rules themselves. What a country!!!!!

 

[OrangeCountyCommuter]

As a potential resale buyer I have a question that to me is very important.

I am thinking of buying into OKW - not my first choice, but pricing and value is swaying me.

I understand that this past spring, Disney changed the resale incentives. New resales after a certain date are only allowed to spend their points at DVC. All the old resales were grandfathered in this rules.

Heres my question: Does your owner contract state that Disney cant change rules on your after you purchase? For example is their anything stopping them from making a new rule that will only allow you to spend your points at your home resort? Or will all changes be grandfathered?

Rule one of buying DVC. Remember that Disney holds all "control" the contract will say "Disney can do anything it wants and all you can do is whine" (Well, they use legal terms, but you get the point! ) If you can't live with that, don't buy! (I can, but lots of posters get hysterical every time they change the rules because they didn't accept that at day one. Accepting that reduces the stress level dramatically!)

 

[disneynutz]

I think I misunderstood Bill's point. I thought is reference to "change of policy" meant the 3/20 changes; now that I reread, I think he is talking about their change of policy towards ROFR, which has caused the prices to drop. I was only pointing out that the small sampling since 3/20 has not shown a drop off, but to your point, since they stopped effectively practicing ROFR the prices have definitely fallen quite a bit.

You are correct, I was talking about the ROFR policy. The majority of our contracts were purchased during the last 4 years and we bought assuming that Disney would continue the policies, rules, and business model that they have had in place for the last 10 years. I was wrong, due to their lack of ROFR purchases, the economy, and more people becoming members, our DVC holdings have lost around $15,000 at todays prices.

Bill

 

[Sandisw]

I am one who believes Disney cannot end your ability to reserve non-home resorts. They may temporarily suspend your rights, in a rare event, but not permanently. I don't know of any large timeshare organization which only permits use of a single resort. If Disney were allowed to make such a drastic decision, think of the consequences. Owners at the smaller resorts like BCV and VWL would be getting blocked out of vacations during peak travel periods with no options for accommodations, people who purchased where they "don't want to stay" would be selling their contracts dirt cheap which would cause a major change in the caliper of owners or risk the possibility of a buy out from another company, and Disney would be spending tons of money in court battling law suit after law suit with people arguing that they were told differently when purchasing. People in our society tend to look toward the negative side of things and worry about things that cannot happen or take place. I say we smile and enjoy the benefits of our "piece of the magic"!

While I do agree that doing it would most likely not happen, if you read the POS, it says that you have the right to trade out to other resorts as long as you are part of the "club". Disney reserves the right to remove any resort from the "club". If someone's home resort is removed, then those members would no longer have the ability to stay elsewhere. Now, do I see them ever removing any of the WDW resorts--no. If anything, maybe the offsite resorts (and even that would be remote) but people do need to understand that technically and legally, it is possible.

 

[Dean]

As a potential resale buyer I have a question that to me is very important.

I am thinking of buying into OKW - not my first choice, but pricing and value is swaying me.

I understand that this past spring, Disney changed the resale incentives. New resales after a certain date are only allowed to spend their points at DVC. All the old resales were grandfathered in this rules.

Heres my question: Does your owner contract state that Disney cant change rules on your after you purchase? For example is their anything stopping them from making a new rule that will only allow you to spend your points at your home resort? Or will all changes be grandfathered?

DVC can change almost anything without input, there are a few exceptions but not much. All you're guaranteed is the ability to reserve at your home resort and that the points for designated units (not lockoff components) will stay the same over the entire resort for the year. Realistically I think you can assume the ability (subject to availability) to book at the home resort and at times, other DVC resorts.

I think the cheapest price at WDW (for WDW trips) at a resort that expires after 2042 is the best value. Almost always that's SSR and not OKW when you look at the expiration. For 2042 resorts and for off property options, you've got to make some pretty hefty adjustments. IMO, if you're happy staying at a given resort a large % of trips, it's reasonable to own there. This leaves out VB, HI, HH and CA for most people. Even then it might be worth the risk due either to the plans to use that resort part of the time (HI) or enough further price reduction (VB & HH). I'd say you need HH or VB at under $30 currently to make it worth the risk, maybe a little more for a VB subsidized contract.

Of course everyone's risk tolerance and situation is different so all we can provide is information. Remember there's also the question of whether to buy in at all as well as home resort and price. I think it's unusual for a retail purchase to be reasonable given the current specifics, no matter how much you like a given option.

Disney can certainly end the ability to reserve other resorts but likely the only way to do it without the members voting is for the ways for the resort in question to be removed from the club itself. This would include if the members voted DVC out, if DVC sold off the management contract, RTU expiration, resort damage and the decision not to rebuild part or all. They could also do it by converting individual contracts to trusts either by unsold inventory, ROFR purchases or contracts with the current owner. Still, I do not think these are major risks. Extremely minimal risks for WDW resorts, mild risks for HI, VB and HH.

 

[Kate3456]

I agree with Dean that DVC properties at WDW offer the most stable prices and long term stability from a financial standpoint. Disney World location can't be duplicated (Bonnett creek exception noted). Also I agree Saratoga Springs gives the most value given the 2057 expiration but if Disney stops the ROFR the longer expiration date won't matter. Unfortunately Saratoga Springs doesn't offer a true comparable 'hotel room' within the property for direct price comparisons as BLT, BWV, BCV, WLV and BWV do in helping to determine its true value.

 

[chalee94]

Also I agree Saratoga Springs gives the most value given the 2057 expiration...

minor correction: SSR expires in 2054.